Wills & Estates
Get Smart About Elder Financial Abuse
Billions of dollars in life savings are lost each year due to the financial exploitation of older adults. Perpetrators include scammers, professional caregivers, unethical businesses and family members.
No federal agency tracks elder exploitation cases on an ongoing basis, but in a survey compiled by the Investor Protection Trust, 20 percent of Americans age 65 and older reported having been taken advantage of financially.
A 2011 study in New York found that only one in 44 cases of elder financial exploitation is ever reported to authorities. “Setting aside any issue of aging, older adults are at the greatest risk for theft simply because they have a lifetime of savings at risk,” says Howard Tischler, EverSafe founder and CEO. “Older adults and the people who care for them need to be cognizant of the risks and common ways they are targeted for abuse.”
Elder financial exploitation also imposes costs on family members, after a victim’s resources have been exhausted. Victims often don’t want to tell anyone what happened, because they fear family members will believe they are no longer capable of independence.
“For seniors, financial abuse affects not only their bank accounts, but their emotional well-being and even their longevity,” says Liz Loewy, EverSafe general counsel and former chief of the Elder Abuse Unit in the Manhattan District Attorney’s Office. “I have seen older victims pass away shortly after learning they were exploited, with their families reporting they simply lost the will to live.”
EverSafe’s Top 10 Tips for Preventing Elder Financial Abuse
1. Have multiple trusted advocates. The “sentinel effect” discourages misconduct by letting those helping to manage a senior’s funds know that their actions are being observed. Having family members or a family member as well as a lawyer, power of attorney, or financial advisor, all of whom have visibility into financial accounts can help ensure no one person is able to take personal advantage. Transparency is critical and a deterrent.
2. Communicate with family members about your future plans. You have a vision for how you want to live as you age. Share it with your family so they understand your views. Consider discussing your will and potentially a power of attorney with loved ones, which will enable people to be aware of your intentions and plans in case you do start to lose capacity. If you have a financial advisor, communicate your wishes to them as well.
3. Understand and talk with loved ones about the most common scams targeting seniors. Learn about common scams, like income tax fraud or the “Grandma/Grandpa Scheme,” where an individual calls and pretends to be a grandchild needing money to escape serious trouble. The National Council on Aging offers more information about common scams on its website.
4. Give money only to entities you have approached. Never provide your personal financial information over the phone to someone who called you first – not even if they claim to be with a company or charity with which you’ve previously engaged. Adding your phone number to the National Do Not Call Registry also makes it illegal for most telemarketers to call you, though charitable organizations are exempt from these restrictions.
5. Be cautious about joint accounts. These can be a good way to allow someone you trust to assist with financial tasks, but naming anyone as a joint account holder gives them direct control over the funds in that account. Joint accounts also make your resources subject to the joint account holder’s creditors
6. Protect online accounts. In many cases, online banking is much safer and more convenient than paper statements, but it’s not without risk. Use strong passwords (no names of grandchildren!) and protect them.
7. Do not provide your account information to anyone who contacts you about a recent data breach. Hackers raiding unsecured databases for personal information are an unfortunate reality of modern life, as are scammers who try to exploit news of these instances by calling or emailing and “phishing” for the information needed to steal your identity. Remember: financial institutions and the IRS do not call or email to ask for personal information.
8. Watch all of your accounts closely. Any unauthorized charge – even something as small as a few dollars – could be a test to see if credentials work and how much attention you are paying. Watch for any unexpected debits or changing patterns of spending.
9. If someone is helping you with financial decisions, have them document all spending. Family relationships can be wrecked by suspicion as much as outright theft, even in the closest of families. Providing visibility into spending helps ensure everyone is clear on how funds are used. Of course, require the same documentation from non-family caregivers as well.
10. Rely on helpful technology to fill gaps. Researchers have found that financial decision-making ability starts to decline by the mid-50s. When you notice financial tasks becoming more difficult or taking longer, consider a technology service that can monitor accounts and identify suspicious activity.
Having younger and older family members involved in monitoring each other’s accounts makes sense and provides the most protection.
EverSafe helps protect a lifetime of savings by offering a simple yet comprehensive service to combat financial exploitation of older adults. EverSafe’s daily monitoring enables seniors, family members and trusted advocates to protect financial accounts, thwart scammers and defeat identity thieves – while preserving independence and privacy. Learn more at: www.eversafe.com.